Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 203.14

-0.8%

Jan 9 3:59 PM EST

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To: wanna_bmw who wrote (85238)	7/17/2002 7:25:41 PM
From: Joe NYC	Read Replies (1) of 275872

wbmw, You're close. I believe the inventory glut is external, or else you'd see AMD's internal numbers change (and they haven't). There was a discussion about this some time ago, and apparently, when the CPU die is in the die form, it is priced on cost basis, meaning cost of wafers + cost of processing. Once packaged, the price is that of finished goods. Suppose the valuation of packaged part is 3x to 4x the die cost, AMD can manipulate the inventory number any way they want to, just by deciding when to package the parts. So this number, internal inventory, becomes almost meaningless indicator. Further complicating the issue is the fact that the inventory is composed of both flash and CPU. I'd expect the Thoroughbred transition to happen very fast - almost over night. Agreed. Palomino transition was very fast so this one should be fast as well. The question is how soon will it happen. THe timing will tell us the magnitude of the internal inventory. Joe

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